I propose to take Questions Nos. 37 and 40 together.
The tracker mortgage examination is the most significant supervisory review undertaken in the context of the Central Bank's consumer protection remit. It is a key priority for the bank and it is working to ensure that the examination is completed as soon as possible.
However, it is critical that each lender carries out a comprehensive and robust review, which achieves a fair outcome for all customers. While significant progress has been made, the Central Bank advises that due to the scale and complexity of the review, it will take some further time to complete.
Specific timelines have been set for all lenders to complete their internal reviews, and some lenders will have their internal reviews completed sooner than others depending on the size of their mortgage books and the complexities associated with them completing the examination. Based on current progress, the Central Bank expects that all relevant lenders will have identified affected customers by mid year and that they will progressively implement measures to address their situations with payment of redress and compensation. The processing and consideration of any customer appeals and the Central Bank's own assurance work is a process that may continue beyond that point for some lenders.
The Central Bank has set down a robust framework whereby lenders' internal reviews will be overseen by independent third parties. As part of the examination, the Central Bank has made clear what it expects of lenders in terms of redress and compensation to impacted customers, namely, lenders will ensure that harm is stopped at the earliest possible time once a group of impacted customers is identified, interest rates applied to impacted customers' accounts are to revert to the appropriate tracker interest rate or impacted customers are to be given the opportunity to revert to such a rate where relevant, redress should ensure that impacted customers are returned to the position they would have been in had lenders' failure not occurred, compensation that reflects the detriment suffered by the individual customer is to be provided by lenders and an additional payment is to be provided to the impacted customers to enable them to take independent professional advice regarding the redress and compensation offers made to them.
The framework of the examination has been designed to ensure that as and when groups of impacted customers are identified, in the first instance, the lender must stop charging the incorrect rate of interest on the customer's account to prevent any further detriment. The framework also requires lenders to establish an independent appeals process to deal with customers who are dissatisfied with any aspect of the redress package that they receive from lenders in respect of these matters.
The Central Bank has also advised that it will consider appropriate supervisory action, up to and including enforcement action, where necessary. All angles, including individual culpability, will be thoroughly investigated in the context of the legal framework. Enforcement measures will be deployed as appropriate, including investigating issues and taking cases under the Central Bank's administrative sanctions procedure together with the use of fitness and probity powers. Enforcement investigations of this type are detailed and forensic, routinely involving the scrutiny of thousands of documents and the conduct of interviews as part of the investigative process. To date the bank has concluded an enforcement investigation in respect of tracker mortgage failures identified at Springboard Mortgages Limited and imposed a monetary penalty of €4.5 million.
The Central Bank is also aware of the motion passed by Dáil Éireann on 26 January 2017 and it is noted that the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach will invite the Bank to attend before it on a quarterly basis regarding the examination.